Some routine legal tasks can be delegated to a qualified paralegal to improve productivity, enhance client outsource paralegal services capabilities, and balance a supervising lawyer's workload. Paralegals can also boost law firm profitability. Paralegals can improve law firm profitability by taking advantage of outsource paralegal services and paralegal billing opportunities. Clients can also benefit from cost savings at law firms. 

We will discuss what legal professionals need to know about paralegal billing today. Furthermore, we will discuss what paralegals can be reimbursed for, the basics of hourly rates for paralegals, and best practices for law firms. Check out how proper paralegal billing can benefit you and your law firm in the following article.

In What Areas Can Paralegals Bill?

Lawyers entrust paralegals with a wide range of tasks and responsibilities for outsource paralegal services. It is important to note, however, that paralegals are not billable for everything they do. The paralegal can generally bill only for legal work of a substantive nature. Legal tasks that require skill, training, education, and experience are handled by paralegals under the supervision of an attorney. In light of this, paralegals may bill for certain tasks, such as eDiscovery, legal document preparation, legal research, client communication.

Administrative or clerical tasks performed by a paralegal are not billable.

What is the Billing Method for Paralegals?

As an attorney, a paralegal is typically paid a lower hourly rate for substantive outsource paralegal services. The majority of paralegals bill clients directly and on an hourly basis.

Paralegal's billing hourly must be able to accurately log portions of their work time. Lawyers and paralegals bill in standard time increments to track and calculate hours quickly. The average lawyer bills in 10-minute increments or six-minute increments. There are law firms that do not exclusively or even at all use billable hours. When setting their fees, firms using alternative billing structures may consider the paralegal's work time. A fixed fee, contingent fee, retainer, sliding scale, or subscription arrangement are all alternative fee arrangements.

There are no lawyers among paralegals. The cost of substantive outsource paralegal services can be significantly reduced with the assistance of experienced and qualified paralegals. In contrast to lawyers, paralegals' hourly rates are typically lower. 

Lawyers should therefore set their paralegals' hourly billing rates reasonably. Additionally, lawyers should consider the following factors:

  •  An overview of a paralegal's experiences. The fee should reflect that a highly qualified paralegal who has been practicing for many years can perform outsource paralegal services more efficiently than a new paralegal.
  •  Paralegal billing rates in the firm's geographic region.
  •  Rates charged by lawyers. Clients often find outsource paralegal services to be more cost-effective.

Keeping your Paralegal Billing Process Efficient and Accurate

Generally, law firms ensure that their overall billing process is efficient and accurate. In the same way, paralegal billing practices are also considered by firm staff. Here are a few tips to remember when billing paralegals:

  • The ethics and standards of paralegal billing should be considered

The standards of accuracy, clarity, and professionalism required by attorneys apply to paralegal billing as well. Additionally, law firms need to be able to distinguish between outsource billable paralegal services and those that are not. At a law firm, paralegals wear many hats and perform many critical tasks. The only legal work that should be billed is substantive work that would otherwise be performed by a lawyer. Paralegal work that is billable in your jurisdiction must also meet the guidelines.

  • Provide specific and detailed information

Effective law firm billing relies on clarity, consistency, and communication. For this reason, it's best practice for paralegal billing to be specific and detailed, and easy to understand my clients. The client should know when a paralegal has completed legal work and exactly what they have done. Paralegals, for example, should provide detailed notes on invoices when billing on an hourly basis.

  • Quick billing is effective 

Clear, accurate bills must be sent to clients promptly and consistently to ensure a healthy law firm collection. However, billing promptly is also an excellent way to minimize confusion in paralegal billing. The longer a firm waits to send a client bill, the harder it is for the client to remember what services they received. Late bills may cause clients to lose track of their invoices. Clarified notes can help ensure a smooth experience for clients, as previously mentioned. The client can also read the bill more easily if it is billed promptly.

  • Utilize a cloud-based billing system

Billing can be made easier and more efficient for the whole firm with the right tools and systems. When several people—lawyers and paralegals—are billing, cloud-based legal technology creates standardized, automated systems that allow everyone to create accurate invoices for clients.

A paralegal can bring many benefits to a law firm's productivity and efficiency. The more law firms know about what tasks paralegals can bill, the more chances they have to increase law firm profits. Delegating billable work to paralegals lets firm's lower client costs while freeing up more lawyer time, since paralegals can complete substantive legal tasks at a lower hourly rate than lawyers.

The benefits of paralegal billing far outweigh the disadvantages. It always pays to know the rules regarding what paralegals are authorized to bill for and what they cannot. Paralegals can be an effective way to serve legal clients better if they learn and abide by those rules.

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